5 Ways Better Banking Practices Can Advance Black Economic Liberation

By Quinn Williams, Director, Equitable Bank Standards

Juneteenth is more than a celebration of freedom; it’s a call to action. While June 19, 1865, marked a moment when enslaved people in Galveston, Texas, learned of the formal end of slavery in the U.S., the fight for true Black liberation continues today, especially in the face of loud attempts to stifle progress. It is a critical time to recognize where financial institutions have both a responsibility and an opportunity to examine their practices and make adjustments that promote helpfulness and resilience instead of harmfulness and resentment.

For far too long, traditional banking practices have contributed to the racial wealth gap by excluding, exploiting, and underserving Black communities.

At Beneficial State Foundation, we believe better approaches can drive racial and economic equity. On Juneteenth, as we reflect on the meaning of freedom, we recognize that ending oppression requires economic justice. The Equitable Bank Standards provide a framework for the industry that I developed with my colleagues and have been testing over the last several years. Within the Standards, you’ll find a roadmap for financial institutions to actively repair harm and support widespread wellbeing, including by investing in Black futures.

Here are five ways financial institutions can help Black communities prosper:

1. Expand Reach and Repair: Systemic exclusion continues to shape economic outcomes for Black people in the U.S., particularly for descendants of enslaved people. While economically disadvantaged communities face significant barriers to fair and affordable credit, financial institutions have both the tools and the responsibility to offer targeted solutions that repair harm, expand access to capital, and help close the racial wealth gap.

Recommended Actions from our Equitable Bank Standards:

• • Develop and implement one or more fairly priced loan products with the specific goal of increasing the number of loans disbursed to economically disadvantaged individuals from BIPOC groups.
  • Develop and implement one or more products, programs, or initiatives with the specific goal of providing economic redress to Black people in the U.S. who are descendants of enslaved people. Note: Consider using special dispensation, such as Special Purpose Credit Programs, to go beyond what is offered to the general applicant pool, while ensuring full compliance with all applicable laws and regulations.

2. Examine Disparities by Race: Despite progress in some areas, racial disparities in lending outcomes persist. Banks must move beyond good intentions and focus on identifying and correcting results that disproportionately affect specific racial or ethnic groups. Analyzing loan data by race can reveal systemic issues that call for meaningful changes to policies and practices.

Recommended Actions from our Equitable Bank Standards:

• • Test your loan portfolio annually for disparate impact by race and ethnicity. (Bonus points to your institution for championing clear Section 1071 guidance as well.)
  • Ensure that 100% of the loan portfolio is reviewed, and when disparities are identified, enact specific and measurable changes to eliminate them. Note: Before making targeted changes, we recommend confirming there’s an identifiable need and strong basis in evidence, consistent with strict scrutiny standards. Learn more about recent legal considerations.

3. Broaden Credit Access: Traditional credit models often overlook the lived realities of individuals from historically excluded communities, reinforcing systemic barriers to financial access. By incorporating character- or peer-based underwriting into credit policies, banks can better serve borrowers who may not meet conventional criteria but demonstrate strong repayment ability.

Recommended Actions from our Equitable Bank Standards:

• • Include the option to use character-based and/or peer-based underwriting as an alternative to the traditional 5 Cs of credit in your credit policy, guidelines, and protocols. Note: In a challenging climate for inclusion efforts, this kind of innovation reflects a values-driven commitment to equity. Read more in Fast Company’s DEI guide.

4. Hold Leadership Accountable for Building Diverse Teams: Leaders play a critical role in shaping workplace culture and opportunity. By incorporating representation goals into compensation and performance evaluations, banks can reinforce the importance of building diverse and inclusive teams at all levels. Ensuring leadership stays accountable in this way reflects a long-term commitment to fairness, transparency, and institutional responsibility.

Recommended Actions from our Equitable Bank Standards:

• • Integrate gender and racial/ethnic representation goals into compensation and performance evaluations for managers and executive leaders.
  • Tie compensation policies for managers and executive leaders to their contributions to advancing gender and racial/ethnic representation on their teams. Note: Maintaining a focus on representation and accountability reflects steady, values-driven leadership. Staying the course, despite deprioritization from others, supports long-term impact and a commitment to a better shared future.

5. Foster Trust by Sharing Workforce Demographics: Transparency builds trust and accountability. By collecting, tracking, and publishing racial and ethnic demographic data across hiring, promotions, and departures, banks can identify gaps, note progress, and build accountability. Public reporting signals a long-term commitment to inclusive practices across the organization.

Recommended Actions from our Equitable Bank Standards:

• • Collect and publicize racial and ethnic demographic data for hiring, promotions, and turnover across all levels of staff and board annually.
  • Publish this data in your Annual Report, Corporate Social Responsibility (CSR) Report, or Impact Report using the EEO-1 format or other comprehensive frameworks. Note: Consider continually expanding demographic categories to reflect the diversity of your workforce and to align with evolving compliance guidance. Read more about best practices and recent legal considerations.

Transformative, Not Performative 

Juneteenth reminds us that freedom is not the finish line; it’s the foundation. For banking to be truly equitable, it must go beyond words to actively dismantle economic injustice and reinvest in liberation.

The financial system helped construct the systems of inequality we live with today. It must now help deconstruct them.

At Beneficial State Foundation, this is what we work to advance every day of the year, and we invite you and your financial institution to join us in advocating for all of us.